SYDNEY — An anti-HIV drug developed in Australia is to undergo Phase II trials in China in part because the backer cannot attract government funds or find investors in Australia to support the project.

John Majewski, chief executive officer of Narhex Operations, a company that distributes a range of skin cosmetic treatments, said the trials will be conducted by China's largest pharmaceutical manufacturer, the North China Pharmaceutical Co.

Majewski said the trial will involve 48 people treated only with the Narhex compound, a protease inhibitor called Nar DG-35.

Only multitherapy trials are allowed in Australia, so Nar DG-35 could not be given to patients in isolation, making it difficult to evaluate the treatment. However, single-therapy trials are allowed in China, he said.

Majewski was visiting the University of Kentucky in 1990, looking for new cosmetic products, when he met Damian Grobelny, a chemist designing compounds aimed at blocking the protease enzymes involved in AIDS.

He persuaded Grobelny to move his family to Melbourne, where the scientist became a visiting research fellow at La Trobe University, in Melbourne, and started developing the drug.

Australian scientists who tested the drug, such as Stephen Locarnini, director of the Victorian Infectious Diseases Reference Laboratory, in Melbourne, said it has considerable potential.

However, they also generally agree that Majewski's background as a cosmetics maker, his determination not to "sell out" to a multinational and his decision to shift development off-shore have hindered efforts to find a backer.

Majewski told BioWorld International last week all the profits from the cosmetics side of his business have gone into development of the drug. He estimated he spent almost A$4 million on Nar DG-35 last year. And he said he was disappointed in the attitude of the Australian government in refusing him development grants.

He said there was some "pain" in continuing, but there was far more pain in giving up.

"I don't like to quit," he said.